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Finance Calc Kit
Auto finance

Money Factor Calculator

Convert lease money factor to APR interest rate and vice versa. Calculate monthly financing costs and total interest for auto leases.

Optional lease details

$
$
months

Equivalent lease APR

6.00%

Money factor 0.002500 × 2400

Monthly rent charge

$137.50

Finance charge on cap cost + residual

Monthly depreciation

$416.67

(Cap cost − residual) ÷ term

Monthly payment

$554.17

Depreciation + rent charge (pre-tax)

Total rent charges

$4,950.00

Over 36 months

Monthly payment breakdown

Monthly payment$554.17
  • Depreciation$416.6775.2%
  • Rent charge$137.5024.8%

How we calculated this

Open to see each step from your inputs to the result.

  1. 1. Convert money factor to APR

    APR (%)=Money Factor×2400\text{APR (\%)} = \text{Money Factor} \times 2400

    APR = 0.002500 × 2400 = 6.00%

  2. 2. Calculate monthly rent (finance) charge

    Monthly Rent=(Cap Cost+Residual)×Money Factor\text{Monthly Rent} = (\text{Cap Cost} + \text{Residual}) \times \text{Money Factor}

    Monthly Rent = ($35,000.00 + $20,000.00) × 0.002500 = $137.50

  3. 3. Calculate monthly depreciation

    Monthly Depreciation=Cap Cost−ResidualTerm\text{Monthly Depreciation} = \frac{\text{Cap Cost} - \text{Residual}}{\text{Term}}

    Monthly Depreciation = ($35,000.00 - $20,000.00) / 36 = $416.67

  4. 4. Calculate total monthly payment (pre-tax)

    Monthly Payment=Depreciation+Rent Charge\text{Monthly Payment} = \text{Depreciation} + \text{Rent Charge}

    Monthly Payment = $416.67 + $137.50 = $554.17

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What is a lease money factor?

A money factor is the small decimal rate leasing companies use to calculate the finance charge portion of your monthly car lease payment. Dealers often quote it as 0.0025 instead of 6.0% APR, which makes it harder to compare lease offers against traditional auto loan rates. This calculator converts between money factor and APR, then estimates monthly rent charges and depreciation when you enter lease details. All math runs in your browser.

For a full lease payment estimate including taxes, fees, and a buy-versus-lease comparison, use the auto lease calculator. To compare lease payments against financing a purchase, try the lease vs buy calculator. For broader annual percentage rate comparisons on loans, see the APR calculator.

Money factor conversion formulas

The standard conversion between money factor and annual percentage rate uses a factor of 2400:

APR (%)=Money Factor×2400\text{APR (\%)} = \text{Money Factor} \times 2400
Money Factor=APR (%)2400\text{Money Factor} = \frac{\text{APR (\%)}}{2400}

The 2400 factor comes from converting a monthly decimal rate to an annual percentage: multiply by 12 months and by 100 to express as a percent, then divide by 2 because lease finance charges are based on the average of the capitalized cost and residual value over the lease term.

Lease payment components

A pre-tax monthly lease payment has two main parts: depreciation and a rent (finance) charge.

Monthly Rent Charge=(Cap Cost+Residual Value)×Money Factor\text{Monthly Rent Charge} = (\text{Cap Cost} + \text{Residual Value}) \times \text{Money Factor}
Monthly Depreciation=Cap Cost−Residual ValueLease Term\text{Monthly Depreciation} = \frac{\text{Cap Cost} - \text{Residual Value}}{\text{Lease Term}}
Monthly Payment=Depreciation+Rent Charge\text{Monthly Payment} = \text{Depreciation} + \text{Rent Charge}

Worked example

A dealer quotes a money factor of 0.0025 on a 36-month lease with a $35,000 capitalized cost and $20,000 residual value.

  1. Convert to APR: 0.0025 × 2400 = 6.00% equivalent annual rate.
  2. Monthly rent charge: ($35,000 + $20,000) × 0.0025 = $137.50.
  3. Monthly depreciation: ($35,000 − $20,000) / 36 = $416.67.
  4. Total pre-tax monthly payment: $416.67 + $137.50 = $554.17.

What counts as a good money factor?

A money factor of 0.0015 to 0.0025 (3.6% to 6.0% APR) is generally competitive for borrowers with strong credit. Always ask the dealer for the buy rate and compare it to current auto loan APRs before signing. Money factors are negotiable, and a lower factor directly reduces your monthly rent charge.

Frequently asked questions

Why do lease companies multiply money factor by 2400 to get APR?
The factor of 2400 combines converting a monthly rate to an annual rate (multiply by 12) and converting a decimal to a percentage (multiply by 100), divided by 2 to average the beginning capitalized cost and ending residual value. The result is 12 × 100 × 2 = 2400.
What is considered a good money factor for a car lease?
A money factor equivalent to prevailing prime auto loan rates, roughly 0.0015 to 0.0025 (3.6% to 6.0% APR), is generally considered good for borrowers with excellent credit scores.
Is money factor negotiable when leasing a car?
Yes. Leasing companies set a buy rate, but dealerships can mark up the money factor for additional profit. Negotiating the money factor down to the buy rate can significantly lower your monthly payment.
Does this calculator include sales tax?
No. This tool estimates the pre-tax base payment from depreciation and rent charges only. Sales tax treatment varies by state and may be applied to the full payment or only the depreciation portion.
Are the results stored on a server?
No. All calculations run in your browser. Nothing is sent to the server, and changing inputs updates the page URL so you can share your scenario.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.